Japan ahead of China in forging African private-public partnerships

By Bob Wekesa Source:Global Times Published: 2013-7-2 22:38:01

Following the fifth Tokyo International Conference on African Development (TICAD) in Yokohama in June, it is important to look at the similarities and differences between this key Japanese mechanism for cooperation with Africa and the Forum on China Africa Cooperation (FOCAC).

TICAD was established in 1993, and its conferences are held every five years. All the previous four TICAD conferences have been held in Tokyo, while the fifth conference was held in Yokohama.

On the other hand, FOCAC was established in 2000 with a triennial ministerial meeting either in Beijing or in an African country.

While FOCAC is principally organized by the Chinese government and a steering committee comprising the chair of African countries, TICAD shows a much wider multilateral structure.

TICAD is organized by the Japanese government as the lead agency in conjunction with the UN Office of the Special Advisor on Africa, UN Development Programme, World Bank and the African Union Commission.

However, FOCAC has recently started moving toward embracing the African Union and Africa's regional economic blocs. It remains to be seen if the resolution of the summit in Tokyo will factor in Africa's regional blocs.

While Japan's aid to Africa is under the Official Development Assistance (ODA) as prescribed by the Organization for Economic Cooperation and Development (OECD), China's development assistance does not follow this approach.

The OECD is a 34-member organization of rich countries which sets regulations for aid to developing or poor countries, and the key regulation is that development assistance should not be tied to business deals such as foreign direct investment.

The official Chinese argument has always been that assistance to Africa should be on a mutually beneficial basis, because China is itself a developing rather than rich country.

While Japan's ODA is channeled through the Japan International Cooperation Agency, it appears that China does not have a central entity solely responsible for aid to African countries.

Objectively, one still sees a close correlation between Japanese aid to Africa and economic cooperation. Japan's business and economic engagements are undertaken by the Japan External Trade Organization, which also handles matters such as foreign direct investment and assistance to Japanese businesses with other countries.

China, however, has created specific mechanisms for the economic cooperation with African governments such as the China-Africa Development Fund.

In my view, FOCAC is more focused on government-to-government cooperation, although the private sector also plays a role, while Japan has a stronger public-private partnership arrangement.

Both TICAD and FOCAC are usually used by Japanese and Chinese officials to announce aid and investment plans.

For many analysts, the announcement of a credit facility worth $20 billion was the most significant announcement by former Chinese president Hu Jintao during the 2012 conference.

Ahead of the 2012 TICAD event, Japan pledged $10 billion for the same purpose, which is half of what China set aside.

While the $10 billion from the Japanese government may be low compared to what China offered last year, it is important to note that the Japanese private sector will be relied on to drive economic cooperation. There are indications that Japanese investors will be pouring as much as $30 billion into Africa between 2013 and 2018.

There is every indication that Japan seeks to change its approach from a giver of aid to focusing on business partnership, just as China does.

It appears China has, over the years, overtaken Japan in Africa, but the recent election of aggressive Prime Minister Shinzo Abe seems to be changing the tide. The future dynamics of the two countries' economic cooperation with Africa remain to be seen.

The author is a PhD candidate at the Communication University of China and visiting researcher at the Journalism Department, Witwatersrand University, South Africa. opinion@globaltimes.com.cn